Discount Window Treatment -

Despite Fed efforts to encourage usage, the DW remains heavily stigmatized.

(2020): A Richmond Fed Economic Brief that explains how stigma undermines the Fed's role as the "lender of last resort". Quick Definition: The Discount Window Discount Window Stigma After the Global Financial Crisis discount window treatment

(2024): Explores why banks use the window outside of crises, noting that smaller banks with illiquid portfolios are the most frequent users. Despite Fed efforts to encourage usage, the DW

Olivier Armantier, Marco Cipriani, and Asani Sarkar Olivier Armantier, Marco Cipriani, and Asani Sarkar Banks

Banks often choose to pay high premiums (e.g., 13–44 basis points above the DW rate) to borrow from private markets rather than use the Fed, simply to avoid appearing financially weak.

If you are looking for a comprehensive research paper on this topic, the most recent and authoritative study is:

Stigma surfaced eight months before the 2023 regional banking crisis and has not significantly subsided since. Other Key Research Papers